above of my province was criticizing the party secretary of the province, blaming him, and that was the time when it disclosed -- [speaking chinese] >> translator: disclosed the figure that 300,000 had died of starvation in that province alone. >> you can watch this and other programs online at booktv.org. from the 20th annual eagle form summit, greg autrey discusses his book, "death by china: confronting the dragon, a global call to action," next on booktv. >> well, let's move across the pacific ocean and talk about china for a bit. greg autrey is a entrepreneur, writer and educator who focuses on china.

he is the senior economist for the american jobs alliance and is an economist with the coalition for a prosperous america. he cowrote the book and movie "death by china" and has also contributed to another book, "the coming china wars." he's going to talk today on "death by china: confronting the dragon." greg autrey, oh, there you are. thank you. [applause] >> thank you. as she mentioned, i teach at the university of california at chapman university, a small private school in orange, california, and i'll be at usc this fall, and i get a chance to look out at a lot of young people like you, but i rarely get a chance to look out at a lot of young people who don't think i'm a crazy nut case, and i have to spend all semester convincing them that there are different ways to think besides the dominant liberal ideology. so glad to have you guys here. you've all been sitting in your

chairs, and i know how edgy it gets, so i'd like you all to stand for just a moment, and we're going to do something completely crazy, and we're going to see the pledge of ahere januaries here if i would. are you ready? i pledge allegiance to the flag of the united states of america and to the republic for which it stands. one nation, under god, indivisible with liberty and justice for all. >> thank you. >> isn't that nice? they knew the words. >> they did, i'm impressed. so how many of you said that when number grade school? do they still do that? did you mean it? raise your hand if you meant it. okay. want you to think about that. the united states actually does matter. and i don't agree with 100% of the things that the previous speakers said, and they're not going to agree with 100% of the things i said. but the great thing that unites us is that we have the first amendment that allows us to have that disagreement and to have an

active discussion so that our nation can move forward. now, we don't always move forward. sometimes we move backwards as we've discussed. but each time we do that, we find a way to move forward. this can't happen in a country we're going to talk about now, china, because despite anything else they might be doing, they are not allowing freedom of speech. so i've got a display over on the side. who here knows what 61398 is? okay. you've probably seen the news story about the chinese government hacking american corporations, right? anybody? so 61398 is a signal core unit in the people's liberation army in china. this is a division of the chinese military run and financed by the chinese government. a company put out a really brilliant report that showed that, basically, 70% of the sophisticated hacking that has been going on for a decade

against western corporations primarily in the united states and against the united states government is coming from this building in the new district of shanghai. this is a problem. i recently testified in the foreign affairs committee on this, and my estimate was that this is costing america $400 billion a year. this is costing one million lost jobs per year. at a time where we cannot afford that at all. jon huntsman, the former ambassador to china, and dennis blair, obama administration employee, did a report recently, and they came up with $300 million and 1.3 million jobs -- 1.2 million jobs. the point of this is, it's a lot of money. it's hundreds of millions of dollars, it's more than a million jobs. this is a great impact on the united states. it happens every year. it is done on purpose by a foreign military. now, i personally believe that if this building you're looking

at on the display was a iranian republican guard building in tehran, that building would be a smoldering pile of rubble before i'd had a chance to testify in front of congress or come speak to you about this problem, but it's not. so that begs the question, why? so that brings up why are we like best frenemies with these folks, okay? [laughter] so we have this thing called the engagement policy that the nixon administration came in, and i come from yorba linda, california, nixon's hometown. live just down the road from the library, great place. the goal was we would seek political liberalization in china, and i mean it in the good term. i'm actually kind of a fan of mr. lock, but i agree nobody is perfect. but the point was that he would have a government that would become more tom rant of all of the things -- tolerant of all of the things that we respect in our constitution and our bill of rights. that we would develop a huge

export market that would create wealth in the united states through our relationship with china. that we would get geopolitical cooperation from the chinese government that would be useful to the united states abroad and that there would be progress in china on human rights. so, first of all, i want to be clear: do not buy the tale that there is some sort of progress towards democracy and that every time the politboro puts forward some new guy, that he's the great liberalizer that's going to bring china forward into the age of democracy. it ain't happening. they're still somemies after all these -- commies after all these years. you've probably seen this chart. the red lines going upwards are the number of private enterprises in china, and the blue bars going downwards are the number of state-owned enterprises in china. sounds good, right? this is progress towards economic freedom and capitalism like you've been told. what you're not getting told is this: the flat line, the blue one down at the bottom, is the average asset size for a private

company in china. flat, okay? yes, there are a lot of new, vibrant companies run by chinese because they are good business people, and they just can't get big because the top line, the one that's a hockey stick, is the average asset size of a chinese state-owned corporation controlled by the communist party of china. the people in china are repressed economically by their government, they are being used as a tool. their hard work is being used as a tool to suck american and western dollars into china in order to empower large state-owned companies which includes all the banks in china. if you go look at the list of the 25 biggest companies in china, every single one of them is a state-owned enterprise. the airlines are state-owned enterprise, the biggest retailer in china is a state-owned enterprise, okay? it is not the vibrant capitalist economy that you think you see when you go there. you go to shanghai, you see a building that says general motors on the side.

general motors opened these buildings while they were receiving t.a.r.p. money from the federal government of the united states and closing plants in detroit which is now bankrupt so they could open plants in china. gm, cars rolling out say buick. that plant and the joint partnership which the chinese government forces them into is 51% controlled by the shanghai automotive corporation which is controlled by the communist party of china. the only thing gm put in was all of the money and the technology and the know how. the chinese run it and, in the long run, own it. so no change there. i wallet to show you something here -- i want to show you something here. this is an oath mandated just last year for all lawyers in china, i swear to faithfully fulfill the sacred mission of legal workers in socialism with chinese characteristics. i swear my loyalty to the motherland, to the people, to uphold the leadership of the communist party.

i would like to find out something, socialism with chinese characteristic, our first speaker this morning talked about national socialism. china is boast nationalistic and socialist. this is a fascist government. calls itself communist and parades itself that way, but they are, essentially, fascist. so we're supposed to get a great export market. i could go on about this as an economist and a lecturer at a business school, but this line that goes up like a hockey stick is our trade deficit with china. now, according to -- [inaudible] which i would love to take apart but i don't have time, this shouldn't happen, okay? this should self-correct in a number of different ways, but it doesn't. we've been doing this for 30 years, okay? and i am a free trader and a free marketer, but you don't do business with criminals and expect to get a good deal. so for 30 years the difference between our revenues and our costs of doing business with china have been negative. what do you call that at a

business school? we call it a loss. [laughter] and, you know, that doesn't seem to make sense, unfortunately, to the a lot of my good, free-trading conservative friends who want to just keep doing because any moment now something freaking magical is going to happen, and we are going to have this wonderful globalized, peaceful, supercapitalistic economy that's going to make us all rich. it's not making us rich. it's making the chinese rich. we need to be aware of this. if you run a loss every year for 30 years, would you keep doing the same strategy in business? would you keep appointing the same ceos? i don't know. so this is the free trade fairy tale i am forced to teach you when i pull out the textbook in macro economics -- macroeconomics. this textbook written by glenn hubbard, the chief economic adviser for g.w. bush in the first administration. he's got a little bar here, sidebar in the book talking about the market system in

action, how do you make an ipad. so he says foxcon, which is based in taiwan, assembles the ipad in factories and ships them to apple for sale in the was. yep, they sure do. then he says, of course, that the market conditions arbitrate where the ipad is made, basically, that the efficiencies of the globalized market decide where the ipad can be made. well, let me show you a little video. i shot this video inside foxcon where they have 750,000 people making products for apple, dell, motorola, all these great american companies that are pouring your investment dollar into china. this is an executive who's taking me around on a little tour of world's largest factory. listen what he has to say about why the ipad is made where it is. audio?

>> well, i'm glad i put sub titles on there. i'm going to try to run it again and see if i can do that. >> is that the free market? no. okay? if you do business with the mafia, you empower the mafia, and you empower crime. and we have laws against that for a good reason. so, frankly, i advocate laws that restrict our economic relationship with china because it's a criminal regime, and we get taken advantage of, and they cheat. and so my free market friends

say, oh, but american consumers benefit, because we get cheap consumer products. it's true. i love my -- [inaudible] we get cheap consumer products. how long does this last? [laughter] this is good for 18 months or whenever my next upgrade comes along, and then it's a piece of hazardous waste. i have to pay some money to protect the environment there this, and then it gets shipped off to china where it's recycled. [laughter] what do the chi tease get? they get a factory, they get productive capacity that feeds their military, they get billions of dollars in american capital, and they get our technology. is that a fair trade? cheap consumer products for the engine of wealth? i don't think so. and economists need to get over their very naive view of how free trade works. so how many of you have been to china? it's beautiful. i want to be clear, i actually like china. there's some vibrant things

going on there. there are people there who are my friends. unfortunately, many of them are in prisons -- [laughter] but nonetheless, you go there, and you see these fabulous things, okay? they did the whole olympic thing just like hitler did to add legitimacy to themselves. they have to build giant towers that are psychological symbols of some sort, and then there's this thing. great, all right? we're all very impressed. you go to shanghai, you look across at pudong, and it's beautiful. but how did that happen? i want to borrow something from our president. they didn't build it. [laughter] this is foreign direct investment into all the countries in the world from the united states over time. guess who built those buildings? while detroit went bankrupt and fell into decay, your 401(k) dollars and the money you put into american banks were fed into big investment banks and shipped over to build china.

unless you honestly believe that state-owned enterprises run by a nominal economist regime are more efficient than the american economy, you have to accept that we're the ones that are funding this. there's a great little story from my neck of the woods, coda automotive. i want you to listen to this quick video. of this company exists in los angeles and was really supported by all the good democratic politicians in california as a green company that was going to create jobs in the united states with their miraculous electric car. so let's listen to what one of their vice presidents of marketing has to say when we confronted him at the l.a. auto show, and note the subtitles. ..

>> we actually assemble the car and send it from california. we construct them in the bay area. this car will have a u.s. stamp and we are selling it in washington state, california is our launch market, washington state and we will be sending them across the country as well. the fastest growing jobs in los angeles county for an employer.

we had the mayor a couple of months ago, pardon me, mayor antonio villaraigosa and many other politicians in stakeholders from the local and political and government affiliates that were here at our grand opening in downtown los angeles. since this car was assembled in the united states with the least 35% u.s. content, we believe that we will have a significant impact on the automotive industry. [inaudible question] >> we have an american savile lives overseas actually works on the car. we have citizens from america that actually employed by us but

we have 256 employees right now and they are based out of los angeles, california. >> how many are overseas? >> i'm not sure. but i'll use the 2000 a number. it is 100%. >> okay, so we are not going to tell you that on film. so this car is made by this enterprise and among other things they import these directly and who would back an organization like back? well, the gentleman with the white hair at the summit is a

guy who is part of the china deal before he took a new job. i want to do notice the u.s. and economic values and that tells you who is in charge. now, john is the commerce secretary of the united states. other people involved in this are president clinton's former chief of staff, matt mccarty. i could go on and on, but i won't. we were supposed to get geopolitical cooperation and i could go through a list of friendly people that the chinese government supports to undermine the united states including an individual who had almost a million dollars of elephant

ivory. we were supposed to get human rights. i think he is a great american hero. and paul from the congressional china commission mentioned this it was miserable in the 102-degree heat in washington, but i was happy to do it. talking to people that truly appreciate what this means. i don't understandably system, but i do respect their right to believe it if they go about their business peaceably. but why we were there, a group of chinese tourists, a group of kids being led by their teacher were walking towards the washington monument and they saw

that there was an anti-communist party protest going on. so the teacher began to lead them in a chance to try to overwhelm the speech that the congressman was give -- giving them. so he was telling them what america was about and using the ideology to fight against freedom of religion right there on the u.s. capitol. but the chinese are very compelled to tell us how we should be running things. when henry kissinger went to meet with him in 2009, he talked about the beginning of the policy and he said perhaps it is in the national character of americans to be taken in by those seem kind and mild.

this is the story behind our engagement policy with china. henry kissinger said yes. but the world is not so simple. but that said, i would like to take some questions. hello in turn. >> let's go to the lady in the back. >> hello, i would like to talk about how we do business with china but we will not do business with cuba. how does that come about? >> okay members of congress have to get reelected so that they can get appointed to do that. they give freely to both parties to get what it is that they want to get.

what they want to get is to exploit the chinese labor market and the lack of any regulation in the environment with workers to drive short-term profits which they believe is a responsibility to their shareholders and undermine the long-term prospects for the country and nation and that can be achieved in china. so it's a matter of convenience. so there is a total double standard when it comes to cuba and syria and any bad behaving country except for china. >> i have a question. so what you're saying is trade with china is not free trade? >> that's right, it is doing business with criminals. we need to reevaluate. we have reasonable relationships with canada and our european partners. but when one of the parties is a criminal regime, using slave labor inside prison camps and willing to make the air so thick

that you can chew it, that is a problem and not good. >> could you talk about those in the republican party and media pretend the trade of china is free? >> absolutely. i heard dana rohrabacher speak yesterday and he definitely touched base with what is going on with china. the idea of free trade within the country, regardless of how absolutely despicable their behavior is justified and we did this before. i think that our guests would let you know henry ford and other american businessmen in the 1930s were enamored with the german miracle of turning around this care. of course they took away and turned and weapon resistance aimed at the united states and our allies. so when you do free trade with

criminals, you're not doing anyone any good in the long run. >> my name is robin and i am from howard payne university in texas. and my economic development costs, we read a book about western imperialism and how the u.s. and great britain kind of imposed the western views on other countries. and it talks about state-owned enterprises and how those can be beneficial in some cases. in your opinion is there ever a time if they don't have a price can be beneficial, you know, at least to get it started and is it ever possible that the private owned. is it ever a good thing, or is it always like this.

tonight that's an excellent question. >> a couple of years on earth day is coming a lot of trouble. the u.s. postal service has basically delivered. in order to keep 300,000 trucks delivering these things can take it to a landfill. this is the area that i study my research relationship. for the government to be a primary customer in the industry, it is devised for the postal system. the transcontinental railroad is

an example. and the internet was handed over to the public. so there are times that i believe the government has a legitimate role. but no, i don't think that this is in anyone's interest. you will find corruption behind it. >> it would seem that the united states government has been taken in by the chinese government for the gentleman's statement. why do you think the united states companies and governments have gone along so willingly with what has been repeatedly exposed to is this. >> because they make money. it is pretty much that simple. there was a famous bank robber

in the '30s and he was asked why was he robbed banks. he said because that is where the money is. so we have created an environment whereby the companies come in order to meet their goals to their sure holders, they must take advantage of this regular sure china. we had have too much regulation. we have tax rates. when i am in california, i think we have a personal and federal income tax it comes very close to france. we need to reform the rules of the united states so the motivations are to keep technology and manufacturing in capital reinvested in the united states and instead we have created an environment where short-term all accounts. part of that is the sec requirement for quarterly reporting that was put in the late 1960s.

and we created a tax system that says please go anywhere else and do your business. >> one more question. >> hello, i am from college in california and we are in a very bad debt crisis right now in california. >> just not why does the honorable governor -- when we need jobs in california, why is he giving them to china or its second law, especially when working conditions are so bad in china. >> his idea is to create a car business that employs 200 people in the united states and tens of thousands of people in china and undermine the great american industry in order to create 200 jobs. because we only count one side of the ledger.

the very famous quote about what we have seen and not seen. so we don't see the destruction they continually focuses on short-term job creation instead of laying and economic landscape to cause long-term prosperity. >> thank you very much for an informative talk. [applause] >> is a booktv.org to watch any of the programs we see here online. type the book title in the upper left side of the page and click on search. you can also share anything you see on booktv.org easily by clicking on share in the upper left of the page and selecting the format. booktv streams online every weekend with top nonfiction books and authors. booktv.org. >> 48 hours